European Plastics Industry
Upfront with growth, Brexit, Industry 4.0 Despite a host of issues, ranging from marine waste to multiple force majeures at materials suppliers, the European plastics industry is in a good state of health, against the backdrop of growth; Industry 4.0 and a circular economy. But a looming issue is that the recent Brexit vote may have turned the table for UK’s plastics industry, with the lack of skills to affect it in the future. European machinery associations report slight growths Europe is the world’s second largest producer of plastics after China and prospects appear to be improving, with trade associations reporting growth. Even in Italy, where consumption has been flat at best for some time, equipment association Assocomaplast, at its recent annual assembly, reported that 2015 was a good year for most companies: while production increased, exports witnessed further growth to over EUR2.9 billion, exceeding the record set in 2007 (pre-crisis) for sales abroad. Italy’s National Institute for Statistics (ISTAT) data on foreign trade of machinery, equipment and moulds for plastics and rubber for the first quarter of 2016 show stable exports, compared to the same period in 2015. This trend is attributable to equipment like extruders, flexographic printers, and injection moulding machines, says the association. Geographically, a positive trend is noted in the EU markets (Spain +27%, Czech Republic +17%, UK +15%, France +14%), with the notable exception of Poland, where sales declined by 25% in the first quarter of 2015. A major export market for Italians, Germany, remained unchanged at just over EUR91 million. Meanwhile, sales declined to the US and especially Mexico, respectively, by 6% and 56%; while exports to Brazil tripled, approaching EUR20 million, while those to China remained stable at just under EUR30 million. Meanwhile, Germany’s plastics and rubber machinery manufacturers association VDMA expects sales to increase by 2% in real terms in the current year with a further 2% rise anticipated for 2017. In 2015, output was up by 4.7% and exports were 1.6% higher. German plastics and rubber machinery exports went to 162 countries in 2015.
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AUGUST 2016
In terms of markets, it says that the US is the biggest, followed by China, Poland and Mexico. “Deliveries to Russia were down by a further 15%, India has bottomed out and there are also positive signs in all the countries of Southeast Asia.” Although export volumes were slightly ahead of the previous year’s level (EUR4.7 billion), Germany’s share of the rapidly growing world trade in plastics and rubber machinery declined to 22.2%. Challenges: unstable materials supply; high energy costs Plastics processors across the continent last year found difficulties in obtaining raw materials. Several major polyolefin plants in Europe stood still for extended periods and global economic and trade framework conditions made it difficult for processors to obtain materials on international markets. These factors included not only the relative weak Euro against the US dollar, but also continued strong demand for plastics in Asia and the US. Indications are that price volatility should be lower this year, however. The situation led to umbrella trade association European Plastics Converters (EuPC) establishing the Alliance for Polymers for Europe, to “provide detailed information on the current polymer market and help assist raw material users through its network of national plastics associations, as well as assist companies in requesting suspension of certain EU import duties to relieve shortages on polymer markets.” In February, The Polymers for Europe Alliance launched its online Europe-wide customers’ satisfaction survey to award the best polymer producers for Europe. Energy costs are also very important for the whole of the plastics industry. Companies across the German industry have been particularly vocal in their complaints – prices are among the highest in Europe – and the German chemical industry is also concerned about its falling international competitiveness, especially versus North American companies who have the advantage of shale gas. The circular economy On top of concerns about materials and energy supply, there is also growing awareness in Europe that more needs to be done about use, reuse, and preservation of precious plastics. Late last year, the European Commission adopted what it says is an ambitious new “Circular Economy Package” (CEP), which it says will “contribute to closing the loop of product lifecycles through greater recycling and re-use, and bring benefits for both the environment and the economy.”